Time to move to fixed bonds ?

meat_n2_reg

Hi All
As I only earn approx 12k a year , I have been using fixed rate 1 year bonds for most of my savings ( leaving emergency fund in instant access account ) 
As instant access saving rates have been higher have put more of my savings into instant savings accounts  , however thinking now that there are 5% + 1 year fixed might be a good time to tie up some of my savings as feel its only a matter of time before savings rates go down again 
Would welcome your thoughts 
Thanks 

eskbanker

meat_n2_reg said:

As I only earn approx 12k a year , I have been using fixed rate 1 year bonds for most of my savings ( leaving emergency fund in instant access account ) 
As instant access saving rates have been higher have put more of my savings into instant savings accounts  , however thinking now that there are 5% + 1 year fixed might be a good time to tie up some of my savings as feel its only a matter of time before savings rates go down again 

Not sure I'm understanding your question - you've been using one year fixes and are now considering using one year fixes?

The fact that longer term fixes are lower rates than one year ones indicates the direction of travel as far as the market is concerned, based on extensive analysis, but that doesn't necessarily mean that it's right....

Albermarle

meat_n2_reg said:

Hi All
As I only earn approx 12k a year , I have been using fixed rate 1 year bonds for most of my savings ( leaving emergency fund in instant access account ) 
As instant access saving rates have been higher have put more of my savings into instant savings accounts  , however thinking now that there are 5% + 1 year fixed might be a good time to tie up some of my savings as feel its only a matter of time before savings rates go down again 
Would welcome your thoughts 
Thanks 

As nobody can see into the future nobody knows.
I, like many others had the same thoughts 12/18 months ago, but so far no downward movement in BoE interest rate.....

kempiejon

About 10 months ago I got in a 6% for 12 month fix. Recently I have fixed again for 5.15%. As 2 year fixes are less than 5% I would grab 5% while you can.
I hope interest rates come down as I have a mortgage renewing 14 months but I know I can't really know in advance with certainty.

EthicsGradient

My attitude is that neither I nor any other individual are likely to outguess the market on interest rate movements, but I do know my requirements for when I need, or would prefer, cash available better than anyone else.

So I work that out, and then sort my cash accounts out with that in mind, assuming we get slightly more interest if we commit to longer-term bonds.

The other possibility is a notice account - if you pick one that gives you notice of any decrease in the rate that is at least as large as the notice you have to give to withdraw (most of them, I think, but not all, so always worth checking the terms and conditions), then you shouldn't get stuck when interest rates do fall, but still have more flexibility than tying it up for 1 year or even longer.

PixelPound

Albermarle said:

meat_n2_reg said:

Hi All
As I only earn approx 12k a year , I have been using fixed rate 1 year bonds for most of my savings ( leaving emergency fund in instant access account ) 
As instant access saving rates have been higher have put more of my savings into instant savings accounts  , however thinking now that there are 5% + 1 year fixed might be a good time to tie up some of my savings as feel its only a matter of time before savings rates go down again 
Would welcome your thoughts 
Thanks 

As nobody can see into the future nobody knows.
I, like many others had the same thoughts 12/18 months ago, but so far no downward movement in BoE interest rate.....

Probably we won't get much downward movement over the next 12/18. So it's a case of what rate is available for that length verses the probability of a rate cut. Agree nobody knows, but unless there is some big economic change the BOE favours very slow decrease and probably even then doubt it would go below 4% as  they prefer to have some legroom to change rates if needed. When rates were already low they had no room to cut on the years of low rates.

meat_n2_reg

eskbanker said:

meat_n2_reg said:

As I only earn approx 12k a year , I have been using fixed rate 1 year bonds for most of my savings ( leaving emergency fund in instant access account ) 
As instant access saving rates have been higher have put more of my savings into instant savings accounts  , however thinking now that there are 5% + 1 year fixed might be a good time to tie up some of my savings as feel its only a matter of time before savings rates go down again 

Not sure I'm understanding your question - you've been using one year fixes and are now considering using one year fixes?

The fact that longer term fixes are lower rates than one year ones indicates the direction of travel as far as the market is concerned, based on extensive analysis, but that doesn't necessarily mean that it's right....

Sorry if I did not make it clear 
When my 12 month bonds have matured this year I have been putting money into instant access as rates were better 
I now think its time to move some of the cash held as instant access  into 1 year / 2 year fixed bonds to protect the rates 
Thanks for all your replies 
Regards 

Alexland

If you see a rate you like and would like to have it for a few years on money you won't need access to then go for it.

That's no prediction on when rates will move or in which direction but at least you will get what you wanted.

Now if rates move and you could have done better you might decide with hindsight it's not what you wanted but that's not really being fair on yourself is it?